Which fuels are favoured in the Energy Union?

Commissioners Maros Sefcovic and Miguel Arias Canete were emphatic during the presentation of a paper on ‘energy union’ earlier this week: member states would not lose the right to decide their ‘energy mix’.

Yet the commission, through varying emphasis on different sources of energy, will be able to influence what energy path governments choose by setting targets, providing subsidies or co-finance schemes and adopting environmental compliance rules.

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So although Wednesday’s energy union paper, “Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy”, does not explicitly tell member states they need to switch from fuel X to fuel Y, there are plenty of signals for would-be investors to look out for.

Gas

Much of the paper is about how the EU can diversify its gas suppliers, and increase its energy security – indeed ‘gas’ is the most-mentioned energy source in the paper.

The EU's executive body promises for example that before the end of next year, it will publish a more detailed strategy paper on how to increase the import of liquefied natural gas (LNG).

Does this mean that gas is a preferred energy source now?

“This is not about using more gas”, Canete said Wednesday. “It's about getting gas from more diverse suppliers, and using it more intelligently.”

Nevertheless, the paper shows that the Commission has no intention of reducing the EU's reliance on gas, a fossil fuel which is not as dirty as coal or oil, but still a fossil fuel.

This was reflected in the hearty welcome given by the industry to the paper. The plans are “a step forward in creating an energy market fit for the future, in which gas will play a strong role”, said industry association GasNaturally.

Shale promoted

Oil, on the other hand, received somewhat harsher treatment with the policy paper saying the EU needs to “take additional measures to reduce its oil consumption”.

The commission promised “further actions to decarbonise the transport sector, which is still essentially running on oil products”, such as petroleum and diesel.

It named an increase in electric vehicles as “important to break oil dependency”.

By contrast, shale oil, a controversial source of energy due to the potentially environmentally damaging side-effects of its extraction, gets a cautious thumbs-up. It is “an option, provided that issues of public acceptance and environmental impact are adequately addressed”.

However, there was enough in the paper for the Brussels-based association of the European petroleum refining industry to be concerned. It complained, in a press statement, that petroleum products and refining were being “completely ignored; or worse dismissed as involving “old technologies”, implying the use of low skilled labour”.

Nuclear

On nuclear energy, commission said only that it will ensure EU countries “use the highest standards of safety, security, waste management and non-proliferation”.

Its careful wording is a reflection of the divisive nature of the nuclear debate in the EU with countries such as France sourcing most of their electricity from it, while countries such as Austria remain vehemently opposed.

“Nuclear energy presently produces nearly 30% of the EU's electricity”, said the commission, refusing to take sides on the issue.

Coal

The issue of coal-fired power plants was also skirted around.

Despite the fact that “decarbonising the economy” is one of the Energy Union's five “dimensions”, the text does not once refer to 'coal', the fossil fuel that emits the most greenhouse gases and the source of about 17 percent of the EU's energy.

Instead it is mentioned obliquely in the text via an aspirational sentence saying: “we have to move away from an economy driven by fossil fuels".

The text also lists the development of carbon capture and storage – which would allow coal-fired power plants to continue running without carbon dioxide being released in the air – as a research priority.

At a political level, the coal industry has strong support in countries such as Poland, where it is the primary energy source.

Nevertheless the industry appears to feel threatened by the direction the EU is taking, as indicated by a recent opinion piece by the secretary-general of the European coal and lignite association (Euracoal).

“Indigenous coal production gives us energy independence. … Yet EU policy is being manipulated in favour of gas, even though most gas is imported and adds nothing to the EU economy”, wrote Brian Ricketts.

Renewable energy

On renewable energy, meanwhile, the EU is less equivocal. The Union is “committed to becoming the world leader in renewable energy”, the paper states.

But, as James Watson of the European Photovoltaic Industry Association noted, “there's words, and there's action”.

The commission announced it would propose a Renewable Energy Package in 2016-2017, but fell short of laying out concrete plans.

“It's not to say that the commission is not supportive of renewables, but it does not really match its grand ideas with the action we need on the ground”, Watson told this website.

A group of European investors let it be known soon shortly after the publication of the Energy Union paper that the ideas in it were not enough to convince them to go green.

“What investors need now is for this vision to be underpinned by policies that give them the confidence to invest in low carbon energy projects”, the Institutional Investors Group on Climate Change said.

Although the paper did not specify new policies to promote wind power or solar, it did say that the commission’s renewable energy package “will include a new policy for sustainable biomass and biofuels”.

Waste

About 1 percent of the EU's energy currently comes from waste, and it could become more, the paper indicates.

The EU should exploit “the potential of 'waste to energy',” it says, referring to the process of generating heat or electricity by burning waste.

As the commission recently withdrew a legislative package on the 'circular economy' which included measures to recycle waste, the reference to 'waste to energy' was met with derision by Dutch Green MEP Bas Eickhout.

“They really performed well,” he said, in reference to what he saw as successful lobbying by the waste incineration industry.

"Before we can even talk about circular economy, it's all being burnt, for energy," he added.

German commission recommends phasing out coal power over the next 19 years - which will provide additional arguments to build the controversial Nord Stream 2 pipeline from Russia, which both the European Commission and the US have reservations about.